The United States economy decelerated during the first quarter of 2025, as businesses braced for sweeping tariffs from U. S. President Donald Trump, according to an“ advance estimate” from the U. S. Bureau of Economic Analysis— marking the first contraction of the country’ s real gross domestic product since 2022.
Real GDP declined at an annual rate of 0.3 % in January, February, and March of 2025, according to the report. That headline figure is a dramatic turnaround from the final quarter of 2024, when real GDP increased 2.4 %.
According to the report,“ the decrease in real GDP in the first quarter primarily reflected an increase in imports... and a decrease in government spending.” When calculating GDP, imports are subtracted, meaning more imports will yield a lower number.
A number of outlets have cautioned that the 0.3 % contraction figure is somewhat misleading. Axios pointed to solid business investment and consumer spending data in the report as evidence“ signaling at least some underlying momentum in the economy— at least once volatile measures like trade are stripped out.” The New York Times offered similar analysis.
But even with this caveat, the economic picture is less than rosy.“ Maybe some of this negativity is due to a rush to bring in imports before the tariffs go up, but there is simply no way for policy advisors to sugar-coat this. Growth has simply vanished,” said Chris Rupkey, chief economist at Fwdbonds.
The Trial Lawyer 61